COSCO SHIP ENGY (01138) fell nearly 6% in late trading. At the time of writing, the stock was down 5.84% to HKD 16.77, with a turnover of HKD 370 million. Market sources indicate that since the US-Iran conflict, restrictions on Middle Eastern exports due to the Strait of Hormuz blockade, coupled with limited growth in crude exports on long-haul routes such as the US Gulf, have led to an oversupply of Very Large Crude Carriers (VLCCs) relative to cargo. From March to May, total VLCC cargo volume was down 54% year-on-year. However, according to Frontline statistics, as many as 55 VLCCs are stubbornly idling empty outside the Middle East Gulf, refusing to head to the Atlantic basin to compete for cargo. The CEO of Frontline believes that this refusal of idle tonnage to operate is keeping VLCC spot rates elevated. Guosen Securities notes that at this stage, traffic through the Strait of Hormuz remains at low levels. Against the backdrop of the strait's blockade, the overall tanker market is in a state of oversupply, and with the current off-season, the volatile trend in tanker freight rates is already considered stable. The firm believes that current tanker rates are still at a bottom support level. A short-term reopening of the strait, combined with a potential surge in crude oil shipping demand and tonnage control by operators like Sinokor, could drive a rapid short-term spike in freight rates.